first one and now, by the way, guys, we want to-- we're 12 seconds away, down at the new york stock exchange, they're going to honor our veterans with a moment of silence, air force, a lot of the viewers who are also in the military, and so just listen. [moment of silence] [moment of silence]

[moment of silence] [moment of silence] ["taps" playing] ♪

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visit stopbullying.gov. >> the fiscal cliff, we're going to hear about it all day, every day from now until the end of the year. now, by january 1st we'd all get hit with a big tax increase, there's going to be a talk in congress how to avoid it. here is republican bob kocher on

fox news yesterday. i think there's a basis for the deal. a way of getting there on the revenue side. the question is it, can we come to terms on the entitlement side. charles: democrats feel the election was a mandate to raise taxes on the rich. that could hold up any deal this democrat senator, kent conrad. >> and look, you can't settle every detail in these next few weeks, what you can do is agree on a frame work agreement this sets out for the committees of jurisdiction how much they need to say it, how much money needs to be raised, what we can also do, is have a significant down payment so the markets understand we're serious about this. charles: meanwhile, the president will spend the week trying to get various groups, including the public to support his version of a compromise. and david, what do you think. >> meet the new boss, same as the old boss, this is the same thing, reduction part two and obama is not going to change, he's a progressive and he's got

the flexibility. charles: flexibility. >> to talk to putin about it and same people to put on a dog and pony show, look, he has no reason not to. he doesn't have to run again. charles: i'm worried we saw in before and same people going to capitol hill and the same results. the opening bell after the break.

>> all right. we're about 15 seconds away from the opening bell, a lot of people on pins and needles, last week the worst week for the stock market in many, many months not a great way to usher in the second term of president obama, but people are genuinely afraid of what's going to happen not just with the fiscal cliff even though that's hogging up the headlines, a lot of things behind that and businesses are worried, and obviously, the stock market is worried. let's check on the big board, we were indicating we'd be up this morning and so far we are, the big board is up 5 points at the start. and rim are going to introduce a new blackberry, ten of them. ten devices on january, and-- >> blackberry 10 we've been waiting for. and it feels like ians for this one device to come out from research in motion. hallelujah, saying whatever you want. it's up 6% today, but don't forget the stock is down over 40% this year, when i checked on the analyst ratings, okay, 10%

had buys. 55% had holds and 35% had sells. so a majority of folks are hold or sell rim. none of them are really, very few are saying buy it. >> i've got it tell you, it's a last ditch effort, the blackberry 10, nicole, thanks a lot. has the united states changed from a nation of makers to a number of takers. new numbers, saying we've been making since election day on "varney & company," a study released from the c.d.c., shows more than 47.1 million people on food stamps nearly 15% of all of america and more than 70.4 million are enrolled in medicaid and that's one in every five americans on the government program. joining us now is mark mehlman from the group and coming at you, americans, have we become a nation of takers? >> actually, not. this is still a very great country where we produce a lot of things, the reality is we do have more people on medicaid than we have in the past, who

are those people? well, the truth is two third of them are seniors in nursing homes and by and large people passed by any construction their making years. and a third of that money goes to children, who are, who are poor, don't have other kinds of health insurance, so, those are folks not yet in their making years. so, i don't think that really says much of anything, except it does say we have a crisis about long-term care in in country, that we've got to solve and deal with. and food stamps. charles: mark, i've got to jump in here a minute. listen, either you're whistling by the the graveyard or you're not being honest here, these are a gigantic enormous numbers and this is not the america that almost anybody watching the show grew up with. certainly you have to be alarmed by the trend? >> you do have to be alarmed by the trend and the fact is, again, two-thirds of the folks are seniors in nursing homes. are you saying we should take that money away and throw the folks, those senior citizens given so much to us, to this country. charles: hold it, mark, hold it one second. let's have an honest discussion, okay? every time we're worried about

something, we throw school teachers in front, we throw the children in front. listen we're not talking about the seniors. >> i'm talking about seniors. charles: and not talking about dog food you guys always. >> that's where the money goes, my friend. charles: no, the money goes a lot of other places. >> no, no, you're wrong. two-thirds of the money goes to seniors in nursing homes. charles: where does the other third go. where does the other third go. >> the other third goes to poor children who don't have other. charles: that's it, that's all, the only people who are getting this program then? >> that is almost 99% of the moneys going to those two places. charles: well-- two things, mark we never do, we never tackle the real-- we spend trillions in the war on poverty instead of fixing productivity and making sure there are jobs for people, where they work themselves out of it, we don't do that. on the other hand, there's fraud. we have and we have to take the seniors in nursing homes and really not going to take the seniors in nursing homes and put them in jobs, i'm all in favor of investments going to create

jobs, believe me, every democrat is. >> and investment creates jobs and jobs and-- >> i have my own company, i have great jobs, a private sector guy, that creates the jobs, i know all about it, and tell you something else, and not going to take too many seniors out of nursing homes. >> aim not talking about seniors, i'm talking about the foundation of the problem, let's get people working and productivity up and raise income levels, all right. >> nobody says that, it's a question about medicaid, not productivity. >> it doesn't work. >> the question was about medicaid not productivity. you can fullminate all you want about productivity-- >> mark, here is the thing though, i think you have to say when you look at this many people on food stamps, that's a record of failure, that's a record of failure for the country and you know, listen, i know, it's not about protecting any political party and i've go1 to disagree with david, it probably is working from a political point of view, but

from an economic point of view we know it's not working and we know something that we should be really afraid of and you know, i've heard people, in your corner like nancy pelosi actually cheer how many people are on food stamp and heard her talk about the multiplier effect and commercials on the radio, hey, go out and get food stamps, is that really the country you want us to be? >> well, look the people who are qualified for food stamps ought to get them instead of going hungry. a program that bob dole and others put together at the beginning. the reality yes we don't want people on food stamps we want people with jobs and working. no question about na. charles: to be fair, mark-- >> the reality we've been in a very deep resection and working out of their recession and while we're working out of this recession, there are not enough jobs. charles: do you fear, one of my greatest fears, it's becoming more seductive to go ahead and drop out the jobs market and give up, because the dole of so much easier. when you start to weigh the pros and cons, that says i'll get my

rent paid, and health care paid, a free cell phone, i'll get food, why would i work? why anyone making less than $50,000 a year, in this country, why would they work if they get all of these goodies? >> the only people who have that attitude frankly are people who have never been out of a job. the reality of people who don't have a job spend every day, vast majority trying to get that job, working hard to get that job. charles: i think that needs to be true. i don't think that's true, that used to be true, unfortunately, i've got to tell you, it's not true anymore, i don't think so, mark. we love having you on, you'll be back. thank you. >> thank you. charles: all right, buddy. another big company warning it's going to have to cut back on workers hour to save health care. only employees working more than 30 hours have to be covered. keep that in mind. here is what papa johns pizza says about making workers part-time according to the naples news,.com. that's probably what's going to happen. it's common sense, that's what i call lose-lose. and says the health care law

will cost papa johns 5 to 8 million a year and david, you know, again all of these laws, all of these trends, it seems like it's forcing us to become a less entrepreneurial country, a country where it's easier not to work than to work, and it's not what we're accustomed to. >> no, it's not. and you're right about the cultural shift and people are now willing to accept the norm that i'm he getting it free. but the fact is nothing is free. there's no free lunch. when it comes to what papa johns is doing, that's part-time is the new full-time. he's got to find a way like many other companies, applebees and others to keep people under the limit so the company survivors and those are starter jobs, college second jobs, jobs that get people through college, maybe a second worker in the household. charles: i say, i watch these-- listen we had the guy on from modell's, mitch modell undercover boss and i see the people who work the jobs eight years and helping the mother pay

the rent. >> exactly. charles: this is critical stuff and when it's said and done, yeah, the spin doctors can take over and say those mean businessmen and mean republicans, but it's the policies that are forcing their pand. >> it is, and that's why i go back to the what's the real problem. the problem is getting to work so they work them offense out of at that poverty rate and become productive members of society. when they're doing that, they're vested in the system and that changes their attitude because now you own and you earn. and you have skin in the game, and that's what mark forgets. he doesn't talk about the real issue. charles: we'll be back on that. by the way, you saw this on "varney & company" and we saw coming gun sales surging leading to president obama's reelection and new at ten, how much those sales were up the be month before the election and it will shock you. oh, investment firm leucadia are going to buy their rival, valued at 3.6 billion dollars. and nicole, tell us what the shares are trading. >> it's a big deal for jeffries

and see the stocks soaring almost 20% to the upside. and earlier highs of the day. and leucadia, owns about 28% of jeffries, so, they have confirm now, that following this transaction, 35% of leucadia's stock owned by jeffries shareholders and basically jeffries stock on this news is soaring and traded and high today as 1732. . charles: big, big deal. thanks a lot. by the way i have the seven early movers today. let let's start with celgene and a phase three study in pancreatic cancer. and gilliard not to be outdone and they say they have a drug that has 100% cure rate for patients with the most common and hardest to treat form of hepatitis c. another gigantic moving. let's watch apple today, obviously taking it big on the chin, a little bit of bottom fishing buying this morning and

see if it holds up. and another one of the plays that used to have a huge following look at the move pt. and jeffries takes us back to the deal. remember when jeffries fell completely apart and everyone thought it was a great buying opportunity, and take a look at tree x. from capital. 839 million dollars i think they're okay with that, it's an all cash deal. speaking of all cash, titanium metal, a stock hammered a couple of years ago, taken over by precision cast parts, 2.9 billion dollars deal and i think it's a great sign for the global economy, make titanium and so many in the next two decades, a fantastic deal for both companies, guys, the fight over the fiscal cliff is beginning and the dow drops more than 500 points in the past month. so will the markets continue to sell off on another four years of president obama after the break. [ male announcer ] how do you trade?

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i put away money. i was 21, so i said, "hmm, i want to retire at 55." and before you know it, i'm 58 years old. time went by very fast. it goes by too, too fast. ♪ but i would do it again in a heartbeat. [ laughs ] ♪ ♪ >> time for a check of the big board. as you can see the dow is having a tough time gaining any traction, we're up, but not by a whole lot. let's check the price of oil. down 12 cents, 85.94. and joining us from portland, oregon, keith fitz-gerald. last week for horrendous for the

stock market. are you looking to buy stocks on weakness? >> very, very, very carefully, i'm not optimistic about president obama's next four years, i think it's going to be very choppy, i think i'm very, very concerned as now about the fiscal cliff. so, to the extent we're buying it's large mega caps in the industry that the world has to have as opposed to wants to have. that speaks to energy, certain types of medicine and technology, but beyond that, we're really pulling in our horns right now. charles: you would term these really, on, some sort of modern day version of widows and orphanses kind of fem nons. >> the gold mining, look to the picks and shovels, not to make a million. looking to the supplies for a million dollars. charles: in february, march of 2009, americans sold 50 billion dollars worth of equity mutual funds when they probably should have been buying 350 billion and a majority sold out because of president obama, in hindsight it

was obviously an expensive mistake. do you think that knee jerk selling the market because the president has a second term could be the same kind of mistake. >> no question about it. the worst possible thing an investor can do. you need to be in the market for appreciation and income and need to use things like trailing stops, for example, that automatically make that decision for you, if you've got a market of millions of participants you're not smarter than that market. i'm not smarter than the market. i don't want to second guess that market, but i do want to build on the fact there are intelligent people and resource corporations with lots of cash and continue going to continue to invest in the market. charles: what happens, keith, it's been smart going to the dividend payers, large numbers that you talk about that generate a lot of cash and for the most part are iron clad. what happens if the passes go into play and all of a sudden doesn't make sense to be an investor, the risk you take is mitigated by the fact that uncle sam is taking the profits? >> i think it's a very fair question and to be honest,

charles, i haven't thought one all the way through. i think there are questions and challenges related to that, but for now odds favor and history favors everything we know favors continued investment. until that point it becomes so disadvantaged to invest i don't see it on the horizon yet. charles: beyond the fiscal cliff do you have worries? for me, i think the fiscal cliff obviously is huge, it's deserved to be at the top of the headlines, but behind that, you know, i'm thinking that a second term is going to bring all kinds of things that, to my mind are going to be radical, go after businesses and i actually have a theory that the president is going to actually going to try to go after profits made abroad befooe they're repatriated. those things worries me. do you have fears about that. don't worry about the conspiracy theories, our viewers love to be labeled. >> let me say as put on the tin foil hat, the realistic fear not only that they'd go after

overseas profits and, but other i think so gives me pause they're going to have retirement assets. if the fed gets into the game and says somehow we can manage your retirement better than you can and going after the money that's socked away in ira's and retirement plans everywhere, that's serious trouble and now they've been looking at it, there have been investigations how they can get their meat hooks into it, and an area fed by debt and fueled by excess, that one really does give me the heebie jeebyes. charles: keith, we can agree with the plan they have they have to find more money so we've got a lot to be concerned about. we love you man, see you soon. >> thanks. charles: gold making a move to the upside. up four bucks right now. 1735, it's one of the winners since the election of last tuesday, now, thousands of residents and long islanders without power after sandy and people are now protesting utility company's poor response and we're going to get david webb's reaction to this after the break. >> i'm very unhappy because we

pie the highest rates in the country and 50 states and lipa has just done terrible, like we don't exist. [ male announcer ] you are a business pro.

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>> it's inconceivable that we don't have power, but what's

really inconceivable we have no answers about what we have to do to restore power. >> people don't have homes, no one knows where to go. the kids lost their sport, lost their activities, they've lost everything and we just want answers. charles: hundreds of people protesting a the offices of lipa, long island utility company. and many have complained the company has been too slow to restore power after hurricane sandy and this is two weeks later than 80,000, two weeks later and 80,000 of their customers still do not have power. david, on your radio show, i know you guys talk about this a lot. >> yeah, i mean the coverage on radio has been really good. charles: what are people telling you, the callers. >> they're hurting. their houses are gone. i have a lot of friends, especially retired cops on staten island, long island, these are blue collar folks, not rich folks, put out across the media rich white peoples and optics play into it. while the houses are gone, they can't get back in and the dep is

supposed to clear up and they need an electric inspection. and a lack of communication and it's just a giant mess. charles: everyone's saying, well, in our area, you know, new york, new jersey, that staten island has become president obama's katrina. the world doesn't know about it, but what's happening behind the scenes is nothing, but pure devastation and they feel like they've been ignored. >> they have been ignored and they've been ignored by not only the media, but by the administration, not coming in and sending in janet napolitano to walk around doesn't solve the problem. sending in resources does solve the problem. charles: right of course, some people do wonder if those are, you know the images that we saw after katrina may be the response would have been better. now, we talked about this for months leading up to election and the latest numbers so we were right. gun sales are surging on fears of a second obama term. n.r. n.r.a. called it on "varney & company" and california voted overwhelmingly democratic and voters raised taxes on

themselves. the head of the state's republican party is here to defend this. >> 2014 and 16 is going to be the bottom for the democrat we have eight of the ten worst foreclosure areas in the country and californians can't afford to bail out sacramento so when they turn this down, jerry brown is going to have to decide to cut back on government and keep in mind, he's grown government over the last two years if you can believe it so i think the democrats are headed to a very difficult state, especially after this tax increase is turned down.

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charles: new at 10:00, we have been reporting for months that gun owners are stocking up in fear of a a crackdown under a second obama term. and now we have our first hard numbers to prove it. background checks up more than 18% last month that's ahead of the president's victory. also new at 10:00 the head of california's republican party on how the democrats could win so convincingly on election day even convincing californians to raise their own taxes. first let's check on the big board. stock market struggling a little bit but has been in the plus column all morning long. and here's the company for this hour, conservative columnist is here, along with david webb from the tea party 365 and of course nicole petallides on the floor of the new york stock exchange. in fact, we want to check in with you nicole.

it is veterans day today and also marines celebrating a birthday. nicole: that's right. i'm so honored here, all of us on the fox business network on veterans day especially to have many folks here from the marine corps on their 237th birthday. and we had a moment of silence here this morning. next to me is major general. also sergeant johns who actually lost both of his legs in afghanistan last year and hhs lovely wife and a whole bunch of folks here. we're so thankful for their service to our country here on the fox business network. we wanted to take a moment to thank all of you so much for your obviously service in returning back from war abroad. well, i just also wanted to check in on the markets. that's one of our major jobs here on the floor of the stock exchange. and so the dow right now is just up about 8 points, but we're checking in on jc penney which is a big loser today on the s&p 500. they are going to be opening stores and actually doing a sale which they haven't been known for lately because of ron johnson but they will be doing a

big sale on black friday and opening 1100 stores early. once again on this veterans day we want to honor our service men and women. charles: absolutely, 100%. thanks a lot nicole. we really appreciate you and of course the soldiers down there. now, huge tax increases are coming. if congress can't reach a deal to avoid the fiscal cliff. dire warnings from the cbo that going over this fiscal cliff is going to send unemployment back to 9%, maybe even closer to 10% in my mind. of course everyone agrees there will be another recession. but both sides seem very dug in on this issue. >> look, you can't settle every detail in these next few weeks. what you can do is agree on a framework agreement that sets put for the committees of jurisdiction, how much they need to save, how much money needs to be raised, what we can also do is have a significant down payment so the markets understand we're serious about this. charles: but president obama says he's ready to compromise. he will spend this week pitching

his deals to business and labor leaders. on friday he met with congressional leaders about this. rich edson in washington, why all the meetings ahead of the sit-down with congressional leaders? it feels like we have seen this before. rich: we have. labor and progressive leaders will actually mention to the president that he won reelection. the senate is controlled by democrats and insists not to give too much away in the negotiations. day after tomorrow he will meet with business leaders. as for why, politically it looks like the president is getting input from across the spectrum. republicans in the past have charged these meetings at least in the first term, many of them they said were for show. democrats and republicans have been over this ground repeatedly for the past few years. they know the solution is available, charles. they just have to pick and choose. charles: picking and choosing can be hard. rich edson thanks a lot. rich: right. charles: i don't know, we saw this, in the first term, he had business leaders come up, then labor came up, then academic

came up. but where's the small business owner? where's the -- to me that's the most integral group in this whole thing that only 3% the president kind of brushes aside that generate 50s% of the profits -- 50% of the profits and the jobs. >> you can increase taxes all you want. if you don't do something about the spending, it is not going to make a difference. john boehner needs to stand his ground. he needs to say we can bring in more revenue, reform the tax code but won't raise taxes on anyone at this time. if the republican party doesn't stand for something, then they may as well call themselves another set of democrats. charles: the republican party was deemed the party of no for the last couple of years, and i think it hurt them at the polls. do they have to compromise somewhere? >> they will likely have to compromise but where they shouldn't compromise is raising taxes. that's going to affect economic output. even cbo talks about another drop in economic output. our gdp growth -- charles: if they don't raise

taxes, how do they do it? what does boehner mean by revenue? >> you have to cut out subsidies. along with that tax reform is necessary so companies can make more money, small businesses. if you make it so they can be better companies, bigger companies, hire more people, even a a part timer, you can't to increase economic output. >> articulate why that's not the solution. explain to people why raising taxes is not going to yield to betterment. you need to articulate. charles: didn't romney do that -- >> he didn't do well. charles: my prediction is they will hike taxes on people making a million dollars or more. that's my prediction >> that's a good prediction. charles: new at 10:00 stories as predicted many times at varney & company guns are flying off the shelves. background checks of people applying to buy guns indicate there's going to be a huge increase. gun store owners have been reporting they have been very

busy since election day. this has been predicted. >> if he gets the second term, get past the election, i guarantee you, i have seen their play book, they are going to go after one or two more supreme court justices and the 2nd amendment as an individual right is gone. charles: 2nd amendment gone, what do you think? >> he'd dead on about the -- he's dead on about the supreme court and leads how we fundamentally transform america. if you make the supreme court to more liberal court, you can set precedent which trial judges are bound to. you can tackle the amendments. you can take u.n. type approach which says we're going to have gun registration. before that what did they do? they zoned you out locally wouldn't go after a federal approach but now he's got that opportunity. >> barack obama did not want to talk about the gun control issue during the campaign because that would have hurt him. he didn't want to talk about fast and furious. he didn't want to talk about all the issues that people were linking to gun control and his

stand on it. now he will have to talk about those things. the difference is he won't pay the price now because now he gets to do whatever he wants over the next four years. charles: he wants to be a hero to the left, not a hero to the entire country. in california, the head of the republican party is brave enough to return to very nooe and company -- varney & company to defend this prediction. >> by what margin does president obama win california. >> less the current poll of 14. charles: not even close, the president beat romney by 20%. joining us now is the california republican party chair. i want you to take a listen to this as well. >> 2014 and 16 is going to be the bottom for the democrats. keep in mind that we have 8 of the 10 worst foreclosure in unemployment areas in the country. californians can't afford to baillout sacramento. when they turn this down, jerry

brown is going to have to decide to cut back on government. keep in mind, he has grown government over the last two years. if you can believe it. i think the democrats are headed to a very difficult space. charles: all right. tom, i think we heard it all. listen, i'm just going to ask, what happened? what happened to your prediction? what's going on in california? >> well, what's going on in california, which matters a lot, first of all, i want to thank all the veterans out there for their guaranteeing our freedoms. what happened is the public employee union spent 70 million dollars passing this tax increase and defeating a paycheck protection. in doing that, they also swamped us at the ballot box when it came to local races what you saw here and it's a very serious message to the rest of the country -- charles: tom, when you came on varney & company, you knew all of that stuff. what made you think -- listen, you know a lot of money is going to be thrown at this thing. what made you think that somehow californians who have been on this -- a path of economic suicide for decades were going

to have an epiphany all of a sudden? >> because they turned down the prior nine straight statewide tax increases and the amount of money that was spent and the amount of quite frankly lying by jerry brown to -- for instance, he went to college students and said there wouldn't be any fee increases if you did this and this morning they are talking about fee increases. the amount of money that business put into jerry brown's tax increase, these were all things that, you know, come out late in the cycle. and quite frankly, it overwhelmed the process and it is not good for america because california is 17% of the national economy. we're not going to have a national recovery as long as california is still in trouble. >> tom, here's one of the failures, that the republicans didn't go out in california and engage the electorate. you can talk about the other side and you are right, 70 billion, large turnout. but you're not going to the people when you pass a 92 billion dollars budget, and you're 16 billion in the hole. you are not connecting that dot because there's no free lunch in

california, eighth largest economy, this thing is going down, and it is going down hard. and the rest of the country can't afford california. >> well, that's true too. look, republicans do need to talk to more voters in california. i pretty much made that the purpose of my chairmanship. with the help of the legislature, the republicans of the legislature, we had 17 minority candidates but for too long republicans have only been talking to their own. when i first came in, i said we have become the party of limited communication. we do a much better job with that in california. but the story of this is the power of public employee unions and the taxes that are jet to come if california -- that are yet to come in california. they are going to come after -pbusiness next. charles: tom, do you think also though do you think that california is a unique situation where -- because i have been out there a lot in the last month or so, and it feels like there are people who are either very poor or very very very rich. you know, the very poor are saying give me more. and the very very rich are saying you know what?

i make 10 million a year. i don't care if i pay a couple extra bucks. >> it's been said california is safe for the very rich, very poor and public employees. we have lost taxpayers to other states since 98. three of the top four states they have gone to have no income tax whatsoever which is sort of part of the national movement where you get what you get is people moving to red states with red state mentality and the bluer states are getting bluer. none of this is good for the country or investors. charles: right. we will leave it there tom. thanks a lot. we appreciate you coming back on. >> take care. charles: titanium metal one of my 7 early movers, a stock i have liked for a long time. nicole: number one on the s&p. the stock is soaring. big deal with precision castparts. it is a 2.9 billion dollars to acquire titanium metals.

at 43% premium we're seeing the stock up about 42%. and 16.50 is a share is what they are offering basically. so this is all about metals; right? it's used in every jet aircraft engine. this is a big deal, so there you see it. that's why it's the number one performer on the s&p 500. charles: i agree. it is really good news for the global economy because they are ordering so many airplanes around the world in countries we have never heard of. thanks a lot. talk to you again soon. nicole: thanks. charles: one of the areas especially hit hard was staten island with hurricane sandy. its eastern shore devastated by the storm surge. you are from staten island. your parents live there. what's going on now? >> my parents still have no power two weeks later. many people around them still have no power. there's massive destruction. you had the fema office closing down because of the nor'easter saying we're closing down for the day because of bad weather. you can't make this stuff up. charles: it's like the army leaving because the other side is shooting. >> exactly. it looks like a war zone if you

go out there. my parents have 40 foot boats in their backyard. many people came home and had no home. massive devastation. red cross has not been terribly good. fema has not been terribly good in terms of getting people what they need at the right time. you have tons of people sitting many days later, very cold, still no power and no answer as to when the situations will get corrected. charles: i tweeted last week, do you think the public response and outcry would have been different if the images were like in new orleans and more poor people instead of better off people suffering? >> you know, you didn't get a lot of initial coverage and then you had some people going in. you had this network. you had cnn. you had a lot of people going in and actually -- people need visuals. you can't just read about this stuff. this is stuff you need to see. you need to see the destruction in order to be motivated and be passionate and getting on twitter saying to our lead whaers are you doing about this -- to our leaders what are you doing about this?

charles: the media also let them down. >> yes, the media needs to stay on the issues. when americans are suffering, that's your job to shine a light on that. charles: we wish luck to your parents as well. >> thank you. charles: the number of americans receiving government entitlements under the president is soaring. the record number of people on food stamps and medicaid. are we becoming an entitlement nation? the judge is next. [ male announcer ] this is the age of knowing what you're made of.

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charles: it's quite a morning for stocks right now. the dow jones industrial average off a little bit, 3 points, still hanging around the 12,800 number. still haven't recovered from the 4 pushgz point -- 400 point drop after the election. sherman williams is paying for another paint company. and papa john's ceo, he says the company may have to reduce worker hours to save money on healthcare. he says it's probably what's going to happen. it's common sense. that's what i call a lose-lose, that's what his quote. cutting workers to part time workers fewer than 30 hours means the company doesn't have to provide healthcare insurance. we will be back on this topic and also entitlements, we will

talk with the judge. i always wait until the last minute. can i still ship a gift in time r christmas? yeah, sure you can. great. where's your gift? uh...

whew. [ male announcer ] break from the holiday stress. ship fedex express by december 22nd for christmas delivery. charles: last hour we showed you new numbers just released showing americans are becoming more reliant on the government. a study from the usda shows more than 47 million people are now on food stamps. and that one in five americans is enrolled this medicaid. -- in medicaid. all rise to judge andrew napolitano author of the new book is here. judge, you know, we had a democrat on earlier this morning who said listen this is no big deal. it is mostly old folks and

babies. you know, is he right? >> no, i think it is a big deal. this is part of the one-liner used by governor romney at a time that he thought he wasn't going to be taped during a private fund-raising section -- charles: the 47%. >> correct, the 47%. that's a different number than the 47 million that are on food stamps but includes that number. obviously the 47% of americans is a vastly larger number. he's talking about the people who receive all or a substantial part of their income from the government. so he's talking about government employees as well as people that are on social security, medicare, medicaid. charles: that's not what he really meant. >> no, i don't think he meant to disparage those people. charles: the gist is there are a whole lot of people on that and they have no reason to change leadership. >> correct. the reason he can say that -- i don't know if he articulated this is that when the government takes money from us whenever we get our paychecks, fdr said it

would hold -- his word, i'm saying that in quotes -- money for us in a savings account. in fact it doesn't hold that money for us. that money goes directly into the treasury and used to pay the government's bills or spend the money however the government wants. when it's time for us to collect social security, the government borrows the money in order to pay us. the supreme court has argued that the government has no contractual obligation even to provide you that money back. it does so because of its own political judgment that it is prudent to do so. so with that as the law, the government doesn't have to give you back the money it is, quote, holding for you. there is an incentive on the part of the people who want to receive that and who are receiving it to send to washington those who will promise to give them that money. and that group of people gets larger and larger each year. right now it's close to 47%. when it reaches the tipping point, when it reaches 50% or more, literally a majority of americans will be using the tools of government to extract

money from a minority of americans. what will there be -- charles: before you guys jump in, i have been pondering this whole thing. i look at greece, portugal and spain. i look at former great empires. they all at one point ruled the world, all the richest country in the world at one point. do you think we're just -- this is just the last chapter of great empires? is this unavoidable? -p>> well, it is unavoidable unless there's a sea change in people's thinking. and that would affect the 47% that's now 47, it is probably going up with every tick of the clock who rely on the government for their existence or for a substantial portion of their existence. otherwise what happens to us? we will become like greece. at some point all the money it borrows and all the money it prints, that money will be worthless and government checks won't clear. >> i get pessimistic sometimes and i'm not sure this is reversible. can you walk me through how we

reverse this pattern and the trend? >> i don't know how it is reversible in the short-term, short of shocking these people and putting them out on the streets. there wouldn't be a political stomach for that. it might be reversible if generations of people were educated on self-reliance rather than dependence on the government. but that means a change 40, 50, 60 years from now. it doesn't mean a change tomorrow. >> a change in our academic systems as well. >> that means the government can't own the schools. as long as the government owns the schools, the kids are going to be taught that the government is right and it will take care of you. >> yeah. charles: you know what? like i said, maybe we will find out this is an unavoidable last chapter, when people can vote themselves more benefits, unless there's someone out there who can articulate the danger of this, ultimately, it is looking pretty dire. >> when the public treasury becomes a a public trough, people will send to washington only those who promise to give them a bigger piece of the pie, and that's what we're seeing.

charles: greece was able to get away with this for 30 years. so it is going to feel good to a lot of people for a long time. no one will be around to bail us out. >> socialism feels good -- >> it feels fantastic until you run out of other people's money. judge, we have to go. i don't know why we don't double book you. [laughter] >> i'm here. charles: we will talk about it in the morning meeting. [laughter] charles: retired general david petraeus steps down as cia director after an fbi investigation into his affair with biographer. did his actions ever put america in danger? our next guest has the answer. can your hearing aid do this?

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>> i am not optimistic about president obama's next four years. i think it will be very choppy. i'm very very concerned as you know to the fiscal cliff. to the extent we're buying, large megacaps, it is in the industries the world has to have as opposed to wants to have. charles: that was keith fitzgerald on our last hour clearly treading very lightly when it comes to the markets. we are following them for you. we begin at 9:20 eastern here on varney & company. let's take a look at the big board. relatively unchanged. a lot of anxiety in the air. we aren't free-falling like last week but the market is not doing a lot. let's take a look at jc penney. last week the company reported

worse than expected sales numbers. the stock took a hit. just a few minutes ago credit suisse downgraded the stock. shares are now trading down $1.47. 19.17 a share. general david petraeus resigned from his position as cia director on friday over extramarital affair with his biographer paula broadwell. this came just days before he was scheduled to testify before congress on the deadly attack on the u.s. consulate in libya. now, questions are being raised over national security and whether classified information was released by his mistress, paula broadwell. joining us now is casey mcfarland, fox news strategist and analyst and all things of this nature. this adds a little twist to your typical and literal work -- analytical work, doesn't it? >> who knew; right? actually i did know. charles: it's like this was an open secret. >> i was in afghanistan 18 months ago right before general petraeus was announced for the cia job and right after paula

broadwell had left. there were rumors at the time that there was an awfully close friendship between the two of them. so i'm not terribly surprised. what i am surprised at is why now. charles, the way this works is when petraeus would have gone from his army job to the cia job, he would have had a new investigation. he would have been subjected to a polygraph test. the first thing they ask you, is there anything in your background that could be an embarrassment? at that point anybody who takes that thing, you know, the dwi i had in 12th grade. i'm sure at that point petraeus it would have come forward. somebody knew. the personnel office at the white house probably knew. the fbi who was conducting it knew. that was 18 months ago. why now? charles: people are worried that there is some scuttlebutt about pillow talk, secrets that might have been told, a lot of people think that could be a serious issue. >> i'm not as concerned with that as the whole idea why might now happen in washington is

paralysis for -- i was in the white house during watergate and what happens when you have one of these investigations is it goes on and on. it's drip, drip. there's all these questions have not been answered about benghazi. petraeus is not going to testify, at least not this week. what will happen is we will go on and on. charles: is it possible he may have said something that would have embarrassed the administration about benghazi and that's your answer to the question why now? >> i don't have a lot of answers to that, but i have a lot of theories. would the administration would have said to petraeus here's what we want you to say, pe -- petraeus would have said i'm not going to say that. then everybody calls bluff. they submit open testimony, the initial prepared remarks to the white house. at that point that issue would have been joined say a couple of days ago. was that what forced the issue? the bottom line though is david

petraeus is now free to say whatever he wants. he doesn't work for the government anymore. he's free to tell the truth. charles: it is unlikely because of the hurdles he faces that he would ruffle anymore feathers than he already has. >> petraeus is the kind of guy that runs towards the bullets. he's doing something really stupid and terrible and he admitted it. charles: you still hold him in high regard? >> different regard, but as a patriot, he's still a patriot. charles: you are the best. thanks a lot. thousands still without power. entire neighborhoods just wiped off the map after sandy. it is now time to rebuild but can new york and new jersey afford it? we will talk about it after the break. [ malannouncer ] it'that time of year again. time for cii price wind. because your daughter really wants that pink castle thing. and you really don't want to pay more than you have to. only citi price rewind automatically searches for the lowest price. and it finds one, you get refunded the difference. just use your citi card

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children by strapping them to his back, wading into the floodwaters to higher ground. he then returned to rescue his elderly in-laws and his wife and then went back again to get 59 -- to get a 90-year-old woman. and pete also has family affected by sandy. what was the impact of sandy on your family? >> all five of my children have homes down here and they all lost their homes including myself. liz: all five of your children lost their homes? >> yes. liz: you lost your home as well in. >> yes, i got flooded out also. liz: what do you make of the government's response here? >> slow initially. particularly the large government federal agencies, fema. but fema once they got on the ground and up and going, they have been doing a very credible job. they're a bureaucracy. they're not a first response agency like the police and fire department. so that would be expected of them. liz: what we're seeing here charles is we're in st. francis

church, and this is a grassroots operation where basically the community and people from the other outer burroughs have been donating food and clothes and all sorts of provisions for the people here. what did you learn from hurricane sandy? it seems to be worse than other hurricanes to the new york city area. >> this is far worse than anything we have ever experienced or ever imagined. the devastation is widespread. large loss of power throughout the area. a loss of life in some instances in the immediate area. liz: we have about 43 people dead. we're on the anniversary of the jumbo jet crashing after 9/11 in this very same neighborhood, charles, and the thing is now people are being told they may not have power until after thanksgiving. what do you make of that, pete? >> we're really not getting any confirmation on when power might come back on. we're not getting any information at all. it is that uncertainty that's lending to the frustration and anger of the residents down

here. they are very self-reliant. they want to get up and going but need to have the power turned on because we're going to need heat very shortly because the cold weather is coming. liz: people are using the debris to light in their fireplaces. can you rely on government in these situations? >> no, you can't rely on government. you have to be self-reliant. get up and get going. depend on family friends and neighbors to get yourself up and going. that's what we're doing here. liz: charles we will send it back to you. we will be doing live updates throughout the day on sandy. charles? charles: thanks a lot. governor cuomo is about to ask the federal government to 30 billion dollars for aid from new york. joining us is steven malanga from the manhattan institute. 30 billion dollars, some are saying it is a bailout in disguise? >> it is not a bailout as far as you can see there's a real heart ache. we are in a situation where number one the states are

basically historically particularly in this region, they are broke. tax revenues are below where they were in 08. the costs have continued rising. places like new jersey are not funding their pensions still at this particular point and now they have this. and plus you have a federal government which in a way they are kind of leaving this whole area behind. the talk of the federal government after the election is of course the fiscal cliff and how much do we cut, you know, in order to -- you know, in order to kind of like deal with this federal deficit. so 30 billion dollars is kind of a drop in the bucket when you think of a 1 trillion dollars federal deficit. charles: for new york though, do you think new york needs all 30 billion to address sandy or will they be able to siphon off some of it to meet other dire needs they have? >> a lot of that 30 billion they are talking about is money that would go to people who have been, you know, lost their homes and things like that. charles: right. >> the problem is right now neither state is in a position

to do the kinds of things to invest the kinds of things like an infrastructure to prevent this from happening again, even though there were warnings about this going back years. charles: we heard this guy with elizabeth macdonald talk about the federal government not being able to react quickly enough just by the way it's structured. doesn't this argue for the idea that we should stop sending so much money to washington, d.c.? you think about how much money people in new york and new jersey send to d.c. every year. wouldn't it have been smarter to keep some of that money at home so we can react to these kinds of crises faster? >> here's the thing, the reason that people call for an agency like fema is that unfortunately when we do keep the money home, we don't spend it on these kinds of things. so new york and new jersey have squandered a lot of money on unessential infrastructure. they ignored calls to do things in the new york harbor that would have protected, so that's part of the problem is we're not very responsible here in this

area either. charles: right. >> but also, steve, when they send the money to federal government, it comes back, they squander it. they use it to fill budget gaps. they don't use the money in a preventive manner, and then we have this problem with infrastructure. the real infrastructure problem is responsibility by the politicians at the local level. >> nobody hands out ribbons or awards if you do things like build storm surge barriers. instead they hand out ribbons and rewards when you do things like build -- charles: essentially what you are saying steven is we can't trust the local authorities because they will attempt to buy votes with that money instead of using it for the right thing? >> after the fact we can demand, after the fact. charles: president obama's green energy policies could end up killing the coal industry. here in the united states thousands of jobs have already been lost because of new regulation. ohio could be hit hardest. that's next. [ male announcer ] this is steve.

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charles: the overall market, well right now it's been flat. struggled all day. we're not down a lot, but the dow is up 1 point right now. but we do have several individual stocks making big moves this morning. let's start with gilead sciences. great news from a trial for the drug to treat hepatitis-c. they say 100% cure rate. obviously that good news is translating to the stock.

another drug company had its experimental drug to treat cancer, didn't work any better than chemo. clovis stock is getting absolutely crushed. precision castparts is buying tie tan yum -- titanium metals. that's why both stocks are higher. we are back in 90 second. we will talk about a bigger crackdown on coal in a second obama administration that's having devastating impact already. luckily though, ya know, i conceal this bad boy undernth my blanket just so can get on e-trade. check my investment portfolio, research stocks... wait, why are you taking... oh, i see...solitary. just a man and his thoughts. and a smartphone... with an e-trade app. ♪ nobody knows... [ male announcer ] e-trade. investing unleashed.

charles: one last check with nicole. jc penney, ow is it doing? nicole: it is down 8 1/2%. it is a big loser. not only today, but also for the year and going all the way back to 2007 when this was an $82 stock, charles. right now we're hearing they are going to do their only sale of the year. don't forget, they had their new head coming in ron johnson from apple saying we're not doing sales and promotion. on the contrary, we're going to have this whole that we are great all the time, with low prices and great products. they are going to do it on black friday. 1100 stores open. opening at 6:00 a.m. and trying to get the shoppers in for black friday. charles: ron johnson came in with a lot of promises. he should have walked around the store once before he started boasting about not having sales. we will talk to you later. thanks. the reelection of the president would be bad news for coal companies. romney had campaigned on platform to unleash energy resources he would have relaxed

regulations on coal mining. there is a perception that the president is anticoal. because of that coal stocks had a big drop last week. take a look at peabody energy, down 10% since the election. one example. joining us now is former secretary of state for ohio. ken, you know, i think it goes without saying that we know that the president is antifossil fuels, but a lot of people think that his administration wants to just kill the coal industry. >> well, he's created charles a zero sum game among sources of energy. in 08 before his election then, he talked about a strategy that would make it unthinkable for coal-powered plants to go forward. he actually predicted that they would go bankrupt. so nothing in his first four years has indicated that he has taken an all of the above strategy, not only to, you now, fuel economic growth, but to put us in a position of energy

independencee charles: so what do you think then, kep? -- ken? because listen we have seen some coal companies have gone out of business. just judging from the reaction in the stock market, a lot of them continue to be in trouble. i would say if it wasn't for the export market, perhaps, you know, particularly china, that many would already be out of trouble. can they make it through some of the draconian measures that the epa is forcing on them? >> you know the epa was supposed to come out by regulation with some new rules and regulations. and they postponed that until after the election. so i would anticipate this week or next week we're going to see more draconian regulations that will strangle economic growth, job creation and put a choke hold on the coal industry. >> ken, what do you think went wrong here in terms of mitt romney's message? this should have been a big issue win for him. moving forward, we're going to have to correct that. what do you think about that? >> well, if you look sat the

coal counties in ohio, romney did win. we just didn't get the numbers out of those counties to compare with some of the big urban counties and his tremendous advantage, meaning obama's tremendous advantage among 18, 19-year-olds and single women. so we're going to have to again as i do with the family research council, we put this -- this is not just a coal issue. this is an income issue. this is a job issue. this is an economic independence issue. and so we're going to have to frame it so working families begin to understand whether there are single mother head of households or two parent households that it is in their interest that this president looks at coal as a source of jobs, economic growth, and a lower cost of doing business in not only our state but in the nation.

charles: you know, obviously, that's not going to happen with the administration. i mean you just talked about the epa being more draconian. can it get any more draconian than it's been? you know, i just almost say it's almost time to -- [inaudible] for for the industry. >> we're going to have to understand that one of the reasons that we have 30 republican governors out of our 50 states and we have a house of representatives that is made up of a majority of republicans, we have to have them speak back to this president's administration. charles: i agree. you know what? they will also have to speak to the american public in the way they understand >> absolutely. charles: we appreciate it. the president was re-elected despite high unemployment, the dismal economic situation, and the message to the g.o.p. from a whole lot of voters is pretty

clear, we simply don't like you. we will talk about it next.

charles: president obama's poor record on the economy didn't matter in the last week's election. he won despite rising debt, high unemployment, and the g.o.p., well, obviously they have a real outreach problem with voters

especially among minorities. we both wrote about this ironically enough over the weekend. in your piece, you sort of -- you really fleshed out a lot of things you think they should be doing. >> i wrote about this. i think it is a combination of very clear articulate conservative message which is a unifying message and you get that out through messengers that are going to resonate with people. we need charismatic enthusiastic people. if you are going to go talk to youth voters you need someone they will relate to. it can't be someone that they won't pay attention to or ignore. i think you have to couple that with the proper outreach. the g.o.p. doesn't like to do outreach because they consider it pandering. it is not pandering. i'm not talking about dividing the country into special interest groups here. i'm talking about taking a unifying message and going into african-american and hispanic communities. go to left-leaning college campuses. go to left-leaning groups and explain to them why your message the right message for everyone. do the outreach. >> there's a difference between

pandering and engaging. engaging is when you go in and talk about policy and issues. put the labels down. when i go in and i talk to college campuses or i talk to high schools, i go in and i talk about the issues that matter to them, whatever it is. you put aside the labels. you get them to buy into the idea. and yes, you do use people that they will resonate with but your message has to be consistent. charles: this morning i referenced dean martin. you're nobody till somebody loves you. you're nobody till somebody cares. the g.o.p. better show they care. highlight reel is next.

charles: here it is. the highlight reel. if the election proves one thing it is that the nation has moved to a nation of takers. 47.1 million people are on food stamps. >> we do have more people on medicaid family have in the

past. two thirds of them are seniors and nursing homes. a third of that money goes towards children. charles: every time we are worried about something, we throw schoolteachers in front. schoolchildren in front. when you both get this many people on food stamps, that is a record of failure. that is a record of failure to the country. we become a country of mediocrity and this is the wrong path to go on. >> we have lost ourselves. it is up to us. voters will need to determine what they want this country to be for the next 50 years. that change will happen now. >> stop being selfish. you have got to make a culture change. charles, if we do not make that change, we cannot demand it of our politicians. charles: you guys are